Implied Trusts

Question 1

What are resulting trusts?

Answer 1

Resulting trusts are trusts where property is held on trust for the person who transferred it or contributed to its acquisition, with the equitable interest ‘resulting’ back to the transferor or contributor.

Question 2

In what situations do resulting trusts arise?

Answer 2

Resulting trusts arise in three situations: (1) when a transfer on trust fails but property is transferred to the trustee, (2) when a person gratuitously transfers property to another, and (3) when a person pays all or part of the purchase price for an asset.

Question 3

What is an automatic resulting trust?

Answer 3

An automatic resulting trust arises when there is a failure in the creation of a transfer on trust, returning the beneficial interest to the settlor.

Question 4

What are the common reasons for an automatic resulting trust to arise?

Answer 4

Common reasons include uncertainty of subject matter, uncertainty of objects, non-compliance with the beneficiary principle, or a surplus fund remaining at the end of the trust period.

Question 5

What is a presumed resulting trust?

Answer 5

A presumed resulting trust arises when a transfer is gratuitous and there is no evidence that the transferor intended the recipient to receive the property as a gift.

Question 6

How can the presumption of a resulting trust be rebutted?

Answer 6

The presumption can be rebutted by evidence that the transferor’s actual intention is inconsistent with the creation of a trust.

Question 7

What is a purchase money resulting trust?

Answer 7

A purchase money resulting trust arises when a person pays all or part of the purchase price for an asset, and the presumption of resulting trust applies unless evidence shows otherwise.

Question 8

What happens when A and B jointly contribute to the purchase price of an asset?

Answer 8

A and B will each gain an equitable interest reflecting their respective contributions unless there is evidence of a contrary intention.

Question 9

What is the significance of Stack v Dowden?

Answer 9

Stack v Dowden established that a holistic approach should be adopted when determining beneficial ownership, allowing consideration of a wider range of factors beyond financial contributions.

Question 10

What are common intention constructive trusts?

Answer 10

Common intention constructive trusts provide a mechanism for determining beneficial ownership based on the actual intentions of the parties involved.

Question 11

What must an individual establish to claim a beneficial interest in sole legal ownership cases?

Answer 11

They must establish a common intention that they should have a beneficial interest and demonstrate detrimental reliance upon that intention.

Question 12

What is the starting point for equitable title in joint legal ownership cases?

Answer 12

The starting point is that equitable title reflects legal title, meaning joint legal owners are presumed to be equitable joint tenants.

Question 13

What must be established to quantify the interests of parties in a common intention constructive trust?

Answer 13

Common intention and detrimental reliance must be established.

Question 14

What happens if an express intention as to quantification can be established?

Answer 14

The court will give effect to that intention.

Question 15

What does the court do if an express intention cannot be established?

Answer 15

The court will attempt to infer an intention based on the conduct of the parties.

Question 16

What is the last resort if the actual intention of the parties cannot be ascertained?

Answer 16

The court will impute an intention for ‘fair shares’ based on the whole course of conduct.

Question 17

What discretion does the court have regarding property rights on divorce?

Answer 17

The court has discretion to reallocate property rights on divorce or dissolution of a civil partnership.

Question 18

Is there equivalent discretion for cohabiting couples regarding property rights?

Answer 18

There is no equivalent discretion for the court when dealing with the property rights of cohabiting couples or third parties.

Question 19

Who is considered the legal owner of registered land?

Answer 19

Registered land is owned by whoever is registered as the legal owner at the Land Registry.

Question 20

What must cohabitees rely on if legal ownership does not reflect beneficial ownership?

Answer 20

Cohabitees have to rely on trusts law.

Question 21

What must be considered if there is no enforceable express trust?

Answer 21

The law on common intention constructive trusts must be considered.

Question 22

What is the presumption regarding equitable ownership for cohabitees in joint names?

Answer 22

In the absence of an enforceable express trust, it is presumed that they are equitable joint tenants.

Question 23

What is the two-step approach confirmed in Jones v Kernott?

Answer 23

Step 1: Rebutting the presumption. Step 2: Quantification.

Question 24

What is required to rebut the presumption that equity follows the law?

Answer 24

Evidence that the parties were not intended to be equitable joint tenants.

Question 25

What factors may indicate the parties’ intention in rebutting the presumption?

Answer 25

Factors include advice or discussions, the reason for legal title registration, the purpose of acquisition, the nature of the relationship, and financial arrangements.

Question 26

What is the burden of proof for rebutting the presumption in joint legal ownership cases?

Answer 26

The burden is on the party seeking to rebut the presumption, requiring unusual facts.

Question 27

What is the primary aim when quantifying interests of parties?

Answer 27

To determine the proportions in which the parties actually intended to hold the land.

Question 28

What is the fallback position for the court if actual intention cannot be inferred?

Answer 28

The court may impute an intention based on what reasonable and just people would have intended.

Question 29

What does the starting point in family homes cases under Stack v Dowden indicate?

Answer 29

Equity follows the law, meaning equitable title reflects legal title.

Question 30

What must an individual establish in sole legal ownership cases to claim a beneficial interest?

Answer 30

They must establish a common intention and detrimental reliance.

Question 31

What must an individual prove in joint legal ownership cases to establish they are not beneficial joint tenants?

Answer 31

They must rebut the presumption by establishing a common intention and qualifying detrimental reliance.

Question 32

What is the starting point regarding sole legal ownership in family homes?

Answer 32

The starting point is that equity follows the law, meaning the sole legal owner is also the sole beneficial owner unless there is an enforceable trust.

Question 33

What is required to establish a common intention constructive trust?

Answer 33

Proof of an actual common intention (express or inferred) to share ownership of the property and demonstration of detrimental reliance upon that intention.

Question 34

What are the two steps in the process of establishing a common intention constructive trust?

Answer 34

Step 1: Establishing an interest. Step 2: Quantification of that interest.

Question 35

What does Step 1: Establishing an interest involve?

Answer 35

Determining if the parties had a common intention for the non-legal owner to acquire a beneficial interest and if that person relied on this to their detriment.

Question 36

What is the holistic approach in establishing common intention?

Answer 36

Common intention should be ascertained in light of the whole course of conduct, considering various factors such as discussions, purpose of acquisition, and financial arrangements.

Question 37

What is the significance of express common intention?

Answer 37

Express common intention is the best evidence of shared ownership and should be about shared ownership, not merely shared occupation.

Question 38

What are examples of sufficient and insufficient evidence of detrimental reliance?

Answer 38

Sufficient: Heavy DIY (Eves v Eves), renovations (Clough v Killey). Insufficient: Decorating (Lloyds Bank v Rosset), looking after children (Burns v Burns).

Question 39

What is proprietary estoppel?

Answer 39

An equitable doctrine that allows a person to acquire property rights informally to prevent unconscionable conduct, giving rise to an ‘equity’ that the court must satisfy.

Question 40

What are the two common situations for proprietary estoppel claims?

Answer 40

1. A mistakenly believes they have a right in land owned by B, and B is aware but does not correct it. 2. B assures A they have or will acquire a right in B’s property, and A relies on that assurance.

Question 41

What is an ‘acquiescence case’?

Answer 41

An ‘acquiescence case’ occurs when A mistakenly believes they have a right in land owned by B, and B is aware of A’s mistake but does not correct it, leading A to act to their detriment.

Question 42

What is an ‘assurance case’?

Answer 42

An ‘assurance case’ arises when B assures A that they have or will acquire a right in B’s property, and A acts to their detriment in reliance on that assurance.

Question 43

What are the facts of Pascoe v Turner?

Answer 43

In Pascoe v Turner, the claimant assured the defendant that the house was hers, leading her to make significant improvements to the property. The claimant later sought possession of the house, but the court held that the defendant had established an equity by way of proprietary estoppel.

Question 44

What are the three main elements of a proprietary estoppel claim?

Answer 44

The three main elements are: 1) An assurance made to the claimant, 2) Reliance by the claimant on the assurance, 3) Detriment to the claimant in consequence of their reliance.

Question 45

What is required for an assurance in proprietary estoppel?

Answer 45

The assurance must be a promise that the claimant has or will acquire a right in property owned by the defendant.

Question 46

How is reliance defined in proprietary estoppel?

Answer 46

Reliance means there must be a sufficient link between the defendant’s assurance and the claimant’s detrimental conduct, effectively serving as a causation requirement.

Question 47

What is the significance of the presumption of reliance?

Answer 47

If the claimant acts detrimentally after receiving an assurance, it is presumed that they relied on that assurance, shifting the burden of proof to the defendant to show otherwise.

Question 48

What does detriment mean in the context of proprietary estoppel?

Answer 48

Detriment is not a narrow concept; it must be approached broadly, considering whether repudiation of an assurance is unconscionable in all circumstances.

Question 49

What is unconscionability in proprietary estoppel?

Answer 49

Unconscionability involves an objective value judgment of the defendant’s behavior by the court, determining if it would shock the conscience if the defendant dishonored the assurance.

Question 50

What remedies can be awarded in proprietary estoppel cases?

Answer 50

Remedies can include transferring property ownership, holding property on trust, granting property rights, or paying a sum of money to the claimant.

Question 51

What principles guide the courts in deciding remedies for proprietary estoppel?

Answer 51

The remedy should not exceed the claimant’s expectation and should aim to prevent or undo unconscionable conduct.

Question 52

What are common situations where fulfilling the expectation may not be appropriate?

Answer 52

Situations include when the defendant no longer owns the property, when the assurance was reneged on years before it was due, or when fulfilling the expectation would cause hardship to third parties.

Question 53

How does proprietary estoppel differ from common intention constructive trusts?

Answer 53

Proprietary estoppel asserts an equitable claim against the true owner, while common intention constructive trusts identify the true beneficial owner and their interests.

Question 54

What is a summary of proprietary estoppel?

Answer 54

Proprietary estoppel allows a claimant to informally acquire property rights based on assurance, reliance, detriment, and unconscionability, with the court having broad discretion to fashion remedies.